Good afternoon, readers. Today’s issue covers updates across trade and investments, with the India-US trade agreement leading the pack.

Nine months after Donald Trump’s tariff shock to India, the US administration has agreed to reduce tariffs on Indian imports to 18% from a punitive rate of 50%. Like all things Trump, this has a cost for New Delhi. India is expected to cut Russian oil imports and increase trade with the US to USD 500 bn while removing tariff and non-tariff barriers on their exports.

The US agreement comes against the backdrop of growing trade with China, which has reached a record USD 155 bn. For MENA oil producers, sustained US pressure on Russian crude will open fresh avenues in India.

Plus: Fractal Analytics is gearing up for India’s first AI listing, targeting a valuation of USD 1.6 bn.

Watch this space

M&A — Emirates NBD’s bid to take a 60% majority stake in India’s RBL Bank for USD 3 bn hit a regulatory speed bump as the transaction triggered change-of-control reviews across the country’s capital markets infrastructure, according to a company statement. The requirement for fresh nods from the Securities and Exchange Board of India and the depositories shows that cross-border banking M&A in the India-MENA corridor is rarely a straight line. Just last month, ENBD became the first Middle Eastern investment bank to secure a category I merchant banking license from India’s securities regulator.

ICYMI- ENBD is acquiring majority control directly from the bank via a preferential issue for roughly INR 268.5 bn. Under Indian law, taking a majority stake triggers a mandatory open offer to buy up to an additional 26% from public shareholders at INR 280 per share. ENBD will cap its total holding at 74% to comply with India’s foreign ownership limits for private banks.

IMMIGRATION — Qatar will introduce a 10-year residency program for entrepreneurs and senior executives as it steps up efforts to attract skilled professionals and investors, Prime Minister Mohammed bin Abdulrahman Al Thani said. The move forms part of Qatar’s broader push to support business growth and economic diversification, following similar long-term residency initiatives introduced in other Gulf states.

Funding backdrop: Separately, state investor Qatar Investment Authority (QIA) will expand its venture capital fund-of-funds program by USD 2 bn — taking total commitments to USD 3 bn — to attract global venture capital firms and support the domestic entrepreneurship ecosystem. Growing numbers of Indian founders, senior executives, and India-focused venture firms operate from Gulf hubs and raise capital from regional investors.

The move comes as Indian startups are increasingly using the GCC — led by the UAE and Saudi Arabia — as an initial overseas expansion and fundraising base, supported by access to regional capital pools, government-backed entry programs, and stronger near-term revenue prospects in the Gulf markets.

M&A— Global private equity firm Advent International acquired a 14.3% stake in India’s Aditya Birla Housing Finance (ABHFL) for INR 27.5 bn (USD 304.1 mn), according to a company statement. Parent firm Aditya Birla Capital will retain an 85.7% stake in the housing finance unit after the transaction. The investment will be made through a primary capital infusion by an Advent entity and is subject to shareholder and regulatory approvals.

IN CONTEXT- The transaction values ABHFL at INR 192.5 bn, and the lender reported INR 422.04 bn in assets under management as of end-December. Advent was an investor in Aditya Birla Capital between 2020 and 2025.

A familiar GCC ground: Gulf sovereign and institutional investors have been active in India’s financial services sector in recent years, backing banks, insurers, and lending platforms. Recent investments by funds including Emirates NBD, Abu Dhabi’s Mubadala, and Saudi Arabia’s Public Investment Fund in Indian and India-linked financial services and lending platforms underline continued Gulf interest in the sector.

Bilateral trade between India and China reached a record USD 155.6 bn in 2025, growing 12% y-o-y, Times of India reports, citing Chinese ambassador to India Xu Feihong. Indian exports grew by 9.7%, but the surge was largely driven by Chinese inputs fueling India’s manufacturing engine.

Why this matters: The record confirms that India’s industrial sectors, particularly electronics, pharma, and renewables, remain structurally tied to Chinese supply chains. The growth suggests an easing of the informal investment freeze that followed a military clash in 2020.

Diplomatic thaw + multilateral alignment: Ties gained momentum after a meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping in Tianjin in August last year, Xu said, calling it a reset in relations. Beijing supports India’s BRICS presidency and is willing to enhance coordination on the development priorities of the global south, he added.

In context: We recently covered China arm twisting New Delhi to easeFDIrestrictions, making it a condition for lifting export curbs on Indian rare earth minerals and auto component manufacturers.

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Data point

INR 363.3 bn (USD 3.97 bn) — That’s the amount foreign portfolio investors (FPIs) pulled out from Indian equities in January, extending a sustained selling streak amid global uncertainty, as per data from the National Securities Depository Limited.

The outflow follows a record USD 18.9 bn exit in 2025, driven by currency volatility, trade tensions, and valuation concerns. Looking ahead, a proposed hike in the securities transaction tax on futures and options in India’s national budget could further weigh on near-term FPI participation, especially among derivative-focused global funds.

Happening today

The Reserve Bank of India’s (RBI) three-day meeting of the Monetary Policy Committee begins today, with the policy decision due on Friday, Hindu Businessline reports. The deliberations come after a cumulative 125 basis point cut in the repo rate since February last year, as the central bank sought to support growth while anchoring inflation.

Expectations, in context: At its previous meeting in December, the RBI reduced the repo rate by 25 basis points to 5.25% and raised its growth forecast for FY26 to 7.3%. The RBI is widely expected to keep the unchanged repo rate at 5.25%, putting an end to the aggressive easing cycle of 2025. Inflation has remained benign, with Consumer Price Index inflation at 1.33% y-o-y in December 2025, staying below the RBI’s 4% target for an 11th straight month. Markets are watching for cues on the RBI’s next policy steps.

The big story abroad

US downs Iranian drone as negotiations continue: The simmering US-Iran situation saw a minor flare up after US forces shot down an Iranian drone approaching an aircraft carrier in the Arabian Sea yesterday. US military officials claim the strike was in self defense, as the drone approached the USS Abraham Lincoln aggressively. Diplomatic talks between Washington and Tehran, however, are still ongoing, US President Donald Trump confirmed.

The skirmish rattled oil markets, sending Brent crude up 1.6% to USD 68 a barrel. With markets anticipating escalations, Brent volatility has reached a peak since the last regional conflict.

MEANWHILE, IN MARKET NEWS- Analytics and software stocks fell sharply after Anthropic debuted AI tools that automate legal and analytical work, dragging down tech-heavy Nasdaq by 1.4% and S&P 500 by 0.8%. Analytics heavyweights Gartner and S&P Global saw 21% and 11% drops, respectively. Investors warned that the selloff could spill over to AI hyperscalers, since software companies are among their largest customers.

PLUS- Walmart made history as the first retailer to cross the USD 1 tn valuation mark yesterday, after rising roughly 26% in the past 12 months.

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